Leasing or Rental Services SAC Code & GST Rate in India

The SAC code for leasing or rental services is 9973, which primarily covers the rental or operational leasing of machinery, equipment and other movable goods without an operator. The GST rate depends on the type of goods rented and the applicable tax entry. Many goods-rental services attract the same GST rate as the underlying goods.

Leasing and rental services use SAC (Services Accounting Code) rather than HSN because they are classified as services under GST.

What Is the SAC Code for Leasing or Rental Services?

Leasing or rental services without an operator fall under SAC heading 9973.

This category includes the temporary use of machinery, equipment, computers, furniture and other movable goods without transferring ownership.

Particular	Details
Service	Leasing or rental services
SAC heading	9973
Service category	Leasing or rental services without operator
Classification	SAC, not HSN
Common examples	Equipment, machinery, computers and furniture rental
GST rate	Depends on the type of goods and applicable tax entry

Heading 9973 also includes certain intellectual property licensing services, which have separate classifications within the heading.

SAC Codes for Different Leasing and Rental Services

The correct six-digit SAC depends on the goods or rights being leased or rented.

Rental or leasing service	SAC code
Transport equipment and container rental without operator	997311
Agricultural machinery rental without operator	997312
Construction machinery rental without operator	997313
Office machinery and equipment rental, excluding computers	997314
Computer rental	997315
Telecommunications equipment rental	997316
Other machinery and equipment rental	997319
Home entertainment equipment rental	997321
Furniture and household appliance rental	997323
Leisure equipment rental	997324
Household linen rental	997325
Clothing and footwear rental	997326
Other goods rental	997329
Licensing the right to use computer software and databases	997331
Licensing the right to use trademarks and franchises	997336

These classifications are based on the official GST Council Scheme of Classification of Services.

GST Rate on Leasing or Rental Services in India

There is no single GST rate applicable to every service under SAC 9973.

Under the GST rate provisions for leasing or renting goods, the applicable rate generally follows the rate on the supply of like goods involving transfer of ownership.

For example, where qualifying equipment rental is covered by this provision and the underlying equipment attracts 18% GST, the rental service generally attracts 18% GST.

However, businesses must check the exact nature of the rental service and applicable rate entry before issuing an invoice.

GST on Machinery and Equipment Rental

Rental of machinery and equipment without an operator generally falls under SAC group 99731.

The exact code depends on the type of equipment.

For example, computer rental falls under SAC 997315, while construction machinery rental without an operator falls under SAC 997313.

The GST rate should be checked against the applicable rate for the goods and the relevant leasing or rental service entry.

GST on Furniture and Household Goods Rental

Rental of furniture and household appliances generally falls under SAC 997323.

Other personal and household goods have separate codes under group 99732.

The GST rate depends on the goods being rented and the applicable tax provisions.

GST on Intellectual Property Licensing

SAC group 99733 covers licensing services involving intellectual property and similar rights.

Examples include licensing software, trademarks, franchises and other intellectual property.

These services have separate GST rate provisions and should not automatically be taxed at the rate applicable to rented machinery or equipment.

GST Calculation Example for Equipment Rental

Suppose a business rents equipment for ₹20,000, excluding GST.

Assume the applicable GST rate for the rental service is 18%.

Particular	Amount
Equipment rental charges	₹20,000
GST at 18%	₹3,600
Total invoice value	₹23,600

For an intra-state transaction, the GST consists of ₹1,800 CGST and ₹1,800 SGST.

For an inter-state transaction, ₹3,600 IGST generally applies, subject to the place-of-supply provisions.

Note: This example assumes an applicable rate of 18%. It does not mean that every service under SAC 9973 attracts 18% GST.

Difference Between Leasing, Rental and Financial Leasing Services

Leasing and rental arrangements may fall under different SAC headings depending on their nature.

Service	SAC heading
Operating leasing or rental of movable goods without operator	9973
Financial leasing services	9971
Rental of residential or commercial property	9972
Rental of transport vehicles with operator	9966

For example, renting a construction machine without an operator generally falls under SAC 997313.

However, renting commercial premises falls under real estate services, not SAC 9973.

Similarly, a financial leasing arrangement may require classification under heading 9971 rather than 9973.

How to Identify the Correct SAC Code for Rental Services

Businesses should first identify the asset or right being rented.

Next, determine whether the arrangement is an operating rental, financial lease or another type of service.

For machinery and equipment, check whether an operator is included, as this may affect the classification.

Then select the appropriate six-digit SAC code and verify the applicable GST rate, exemptions and conditions.

Businesses can use the official GST Portal to search SAC codes by service description.

Official Sources

1. GST Council – Scheme of Classification of Services
2. GST Council – Explanatory Notes to the Scheme of Classification of Services
3. CBIC – GST Rates for Goods and Services
4. CBIC – Circular No. 32/06/2018-GST
5. GST Portal – Search HSN/SAC Code

Last Reviewed: 21 October 2026